Peso takes a beat­ing

The elec­tion of Don­ald Trump has caused in­vestors to bet heav­ily against Mex­ico, its cur­rency and Mex­i­can com­pa­nies. They worry that Trump’s plans to build a wall along the bor­der, throw out un­doc­u­mented im­mi­grants and rene­go­ti­ate trade agree­ments will dam­age the coun­try’s econ­omy.

The peso has fallen 8 per­cent this week to roughly 20 pe­sos to the dol­lar, its low­est value in history. In com­par­i­son, the peso traded at roughly 13.50 pe­sos to the dol­lar two years ago, well be­fore Trump an­nounced his can­di­dacy. The stock mar­ket in Mex­ico has fallen nearly 4 per­cent just in Novem­ber. In­vestors are bet­ting that a Trump Ad­min­is­tra­tion will rene­go­ti­ate large parts of the North Amer­i­can Free Trade Agree­ment, ap­proved in the 1990s. NAFTA al­lows most goods to pass be­tween Mex­ico, the U.S. and Canada freely. Sev­eral com­pa­nies have op­er­a­tions in Mex­ico to take ad­van­tage of cheaper la­bor, for ex­am­ple au­tomak­ers. There are also con­cerns that Trump’s de­por­ta­tion of mil­lions of un­doc­u­mented im­mi­grants will cause re­mit­tances to Mex­ico to dry up.